General Discussion
In reply to the discussion: Stop it, stop saying Social Security needs reform, you are a Democrat, right? [View all]HiPointDem
(20,729 posts)reason was actually stated explicitly in the discussions during the creation of social security.
Given that wage income is structured unequally, with a small minority making a lot of income and most people making not so much, a flat tax on all wage income means that a small fraction of earners will be funding a majority percent of the cost of the program.
If you give them benefits in rough proportion to their contribution, there's not much left for the rest of beneficiaries, and the program doesn't succeed as a safety net.
If you don't give them benefits in proportion to their contribution, the program can be demagogued as 'welfare.' Lower-income people can't say "I paid for my benefits,' because in fact, they didn't pay for most of them.
This point, about keeping the program safe from this kind of attack, was discussed explicitly.
The solution was to cap contributions to cover roughly 90% of wage income and disburse benefits in rough proportion to what everyone pays in, with low earners getting a little bump and high earners getting a little haircut.
And this is the main reason that SS is the most successful and longest-lived retirement security program in history, and the most popular social program in america, supported by people at every level of income.
You are not wiser than the people who created social security.
Every deviation from their funding formula has weakened the program, not strengthened it.
You want to hit high earners, you can hit them through the income tax, which hits both labor and capital. Then they can PAY BACK THE $3 TRILLION THEY OWE TO SOCIAL SECURITY.
Which is something folks like you are loathe to talk about.
Social security is not a welfare program.
The person making $113K pays income taxes at a lower rate on his $113K than the person making $250K does the proportion of his income over that $113K.
The person making $250K receives the same SS benefits as the person making $113K.